Hard-won lessons about money and investing

Re:Hard-won lessons about money and investing by Ecio78 on Sunday November 30, 2014 @02:17AM (#8676263)

Mr. Money Mustache will probably tell you to move to a different place[1], saving time and money by reducing the commuting time[2] etc..

NB I neither agree nor disagree with his ideas (still have to decide.. :))

[1] http://www.mrmoneymustache.com/2011/09/28/get-rich-with-movi... [2] http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-c...

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Re:Hard-won lessons about money and investing by yen223 on Sunday November 30, 2014 @06:22AM (#8676572)

By my calculations, it's generally much better to live in a high-cost area while earning a high wage, than to live in a low-cost area while earning a low wage. This is because a lot of products out there have a fixed cost which isn't based on geography (think iPhones). A higher wage makes it easier to purchase those items.

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Re:Hard-won lessons about money and investing by randomdata on Sunday November 30, 2014 @10:31AM (#8677004)

My calculations differ, though they are probably based on different locations than you used, which changes the numbers.

Median incomes are 75% higher in the high cost area, but housing costs are 200-400% higher, which, being a major expense for just about everyone, quickly erodes any gains you might make on the income side. Services, like internet connections, were also more expensive in the high cost area. Goods like iPhones are the same in both places, you are right, but is actually a larger portion of your disposable income because of the higher living costs.

The one place you might be able to make gains in the high cost area is if you struggle through paying those 400% higher housing costs with the intent of selling your home and moving to a low cost area later in life. Then you can ride that significant equity you have built, assuming the property maintains or increases in value.

That said, my preferred method is to live in a low cost area and work in a high cost area (telecommute).

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Re:Hard-won lessons about money and investing by Ecio78 on Sunday November 30, 2014 @01:12PM (#8677504)

That said, my preferred method is to live in a low cost area and work in a high cost area (telecommute).

yes but it also depends how you consider in your calculation the costs of telecommuting (costs of travelling, time lost etc..)

I'm thinking about this right in these days, as I'm living and working in a quite rich but expensive country (Luxembourg) where real estate prices (rent&purchase) have grown a lot in the past years, and are still growing (two digits increase of prices yty), while you have surrounding border areas (Belgium, France, Germany) that are way cheaper (half or even less per square meter) but are located 30-40km away with really congested roads or slow public lines (at least 45min per trip, easy to become 1-2hours in case of accidents or traffic jams)

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Re:Hard-won lessons about money and investing by decode on Sunday November 30, 2014 @01:58PM (#8677660)

> yes but it also depends how you consider in your calculation the costs of telecommuting (costs of travelling, time lost etc..)

Since it seems that English isn't your first language, I thought I'd point out that "telecommuting" means you work from home, and "commuting" means that you travel a long distance to get to work. So, there are no costs or time lost when telecommuting, because you don't have to go anywhere.

The commenter you're replying to is saying he works from home in a low cost area, but works for a company in a high cost area (possibly hundreds or thousands of kilometers away).

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Re:Hard-won lessons about money and investing by Ecio78 on Sunday November 30, 2014 @04:12PM (#8678113)

you are right I'm not native English speaker so thanks for spotting that, I've always used "remote working" or "teleworking" for describing that, but not telecommuting (maybe because commuting means "travelling to work" and tele means "over a distance", so the compound doesn't make too much sense for me, at least if you don't put a negation somewhere :D)

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Re:Hard-won lessons about money and investing by dunham on Monday December 01, 2014 @12:46AM (#8679707)

I think the compound resonates with us because it reminds us of both "telephone" and "telegraph" which work remotely and electronically.

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Re:Hard-won lessons about money and investing by PavleMiha on Sunday November 30, 2014 @08:57AM (#8676824)

And even if all costs scaled completely linearly with your earnings saving 20% of your income in a high-cost/high-wage are will earn you more money than 20% in a low wage area.

You can always move to the low-cost area when you are ready to stop working.

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Re:Hard-won lessons about money and investing by jacquesm on Sunday November 30, 2014 @08:24AM (#8676766)

So, the optimum would then seem to be to live in a low cost area making a high wage.

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Re:Hard-won lessons about money and investing by SteveGerencser on Sunday November 30, 2014 @09:16AM (#8676853)

It can be done. My wife and I both work remotely and are able to earn significantly more than the average income for our area. She is an hourly engineer and I work as a consultant. We get to live where we want and do the work we want. We could both make significant;y more if we were to relocate, and we have in the past, but we enjoy the lifestyle here and are happy to give up some top end income for quality of life.

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Re:Hard-won lessons about money and investing by m-i-l on Sunday November 30, 2014 @01:48PM (#8677617)

I tend to agree. The other point to consider is that if you are (for example) putting 30% of your salary in to a mortgage in a high cost high income area, you will have a much more valuable asset by the time you have paid off your mortgage than you would if you put 30% of your salary into a mortgage in a low cost low income area. In fact you may well have enough equity to fund a nice retirement in a cheaper part of the country.

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